- NGL Energy has recently concluded an already very challenging fiscal year that sadly saw a bad ending due to the Texas Winter Storm.
- This made their fiscal year 2021 terrible across the board with their operating cash flow down around 20% year-on-year and their leverage climbing even higher to seldom seen levels.
- Whilst this sounds quite scary, thankfully they should be set to turn a corner during their fiscal year 2022 with earnings recovering and free cash flow pushing their leverage down.
- Despite this bad end to the year, their net debt only edged up by a slight 1%, and thus since this earnings impact was only temporary, nothing has materially changed their all-important deleveraging timeline.
- Since they could sufficiently deleverage within as little as only one to three years and thus still have very solid prospects to reinstate their distributions, I believe that a bullish rating is still appropriate.
For further details see:
NGL Energy: A Bad End To An Already Terrible Year, But Minimal New Damage